The common assumption among policymakers
is that, in order to maintain its higher living
standards against emerging markets competition,
the United States must invest more in higher
education. To achieve this, the government has
instituted a massive student loan guarantee
program, with over US$1 trillion outstanding and
an average of $25,000 in debt for every graduating
student with debt.

Yet millions of
students continue to graduate with degrees that
have no obvious real-world benefits. There’s a
disconnect here, and it is beginning to appear
that the current US obsession with higher
education is misguided.

The traditional
idea of higher education was to train the literate for

the church, whether
Catholic, Episcopalian or other Protestant.
However, a hundred years ago, for the elite on
both sides of the Atlantic, a very different
approach had been devised.

This was best
illustrated in Evelyn Waugh’s immortal
Brideshead Revisited, in which the
protagonist, Lord Sebastian Flyte, wanders round
Oxford with a teddy bear, drinking champagne,
eating quail's eggs and occasionally throwing up
onto other students' carpets. Americans will scoff
at this depiction, but really the Harvard of
Theodore Roosevelt was not very different, except
in that it involved the occasional
life-threatening game of football.

Flyte's
Oxford was not intended to train him for real
life, it was intended as a highly enjoyable three-
or four-year holiday before real life intruded.
For the middle classes whose fathers were not
marquesses - a majority at Oxford even in Flyte's
time; there are only 34 marquesses - the system
applied a gloss of social polish and connections
that was useful in later life, but did not impart
more than a modicum of knowledge. Certainly the
education provided was not expected to involve a
huge amount of work, or to be useful in a
subsequent career.

This changed after 1945
in the United States and from around 1960 in
Britain, as a higher percentage of the population
experienced a college education (in the United
States often financed by the post-World War II "GI
Bill" and in Britain essentially free, with only a
modest means-tested contribution, under the 1944
Education Act).

The increased access of
the masses to college education produced a greater
competitiveness at the top colleges, so that when
I went to Cambridge in 1968-71 access was more
competitive and more work was expected from
students than had been the case 30 years earlier.

Even then, however, access to top colleges
was less competitive than it is today. While I was
expected to have a reasonable mastery of Latin in
the entrance examination there were no probing
"essays" in the application, and my interview at
Trinity College consisted of a most enjoyable
discussion about the career of the cricketer Jack
Hobbs. (I aced it by remembering that he amassed
197 first-class centuries not 198, with the two
scored on the unofficial India tour of 1925-26 not
counting. Presumably as I was to study mathematics
such statistical precision was thought valuable!)

Currently, not only are almost all
students expected to get a college degree, but
those of superior abilities are expected to carry
on for a masters' degree, a PhD, or two masters'
degrees, with the second being in business, law or
journalism, according to the student's future
activity.

The excessive credentialism of
the US system was exemplified at a medical
conference I attended recently, where the
attendees were surprised how many Chinese doctors
were prepared to engage in primary medicine, but
then explained patronizingly that many Chinese
doctors had only an undergraduate degree. It
occurred to me at that point that US medical costs
could be sharply reduced and quality improved if
primary physicians, the principal point of contact
with most patients, could be qualified in four
years instead of 10.

Similarly from the
1890s, the American Bar Association began to press
states to require that lawyers attend not only an
undergraduate program but a three-year law school
in order to pass the state bar exam; currently all
states but California, Vermont, Virginia and
Washington require this. As with doctors, the cost
of legal services could be drastically reduced by
eliminating this requirement of no less than seven
years of college study to enter what is in most
cases a fairly intellectually undemanding
profession.

The rising tide of
credentialism may however have peaked for two
reasons: the excessive cost of college education
and its diminishing quality. First, there is
considerable evidence that finance availability is
pushing up college costs. As college funding has
become more readily available, it has reduced the
financial pressure on colleges, since few of their
students are today paying their way from part-time
jobs and parent cash flow. Huge endowments in the
Ivy League, which allow those elite colleges to
provide full scholarships for students, focus the
competition between colleges ever more closely on
league table "prestige" rather than costs.

Within the colleges themselves, the ranks
of college administrators have exploded (as is
also the case in the medical profession, equally
insulated from market forces). So have their
earnings - according to the New York Times, in the
decade between the 1999-2000 and 2009-10 college
years, the average college president's pay at the
50 wealthiest universities increased by 75%, to
$876,792, while their average professorial pay
increased by only 14%, to $179,970. (Average
college tuition costs increased by 65% and
consumer prices by 31% during that decade.) That's
precisely the opposite of what you'd want to
happen if you were concerned about college
productivity and cost. For the very brightest
students, or those from really good schools, the
appeal of the Ivy League may remain overwhelming.
The knowledge that only four years' moderate
attention to politically correct drivel will get
you a piece of paper that more or less guarantees
you a six-figure salary thereafter is for most
rational kids a very good reason to attend an Ivy
League college and major in one of the softer arts
or social sciences subjects.

For those of
a mathematical, scientific or technological bent,
however, the Ivy League is much less attractive;
you will have to work much harder, and when you
graduate you will be subjected to competition from
innumerable Third World students on H1B visas,
making the average salary for even Ivy League
science graduates far below those available in law
or medicine.

What's more, most
undergraduate courses in science are now so far
from the technological cutting edge that the
student will have to waste several more years in a
masters program before arriving at a point where
he is actually useful to potential employers.

For these science-oriented students, or
for others of high intelligence with an
independent bent, the Internet has opened a new
opportunity. Many college courses are now
available online, either for free or for a small
fraction of the $5,000 they would cost as part of
private college major. For example, I recently
came across the 24 video lectures comprising the
Yale course on Game Theory, a relatively new area
of economics I wish I understood properly.

For students with initiative this brings
the possibility of obtaining a college education
through Internet courses, perhaps at a higher
level than that of second-tier colleges and
certainly at a far lower cost. This would enable
them to avoid the rigidity of many college degree
programs, which include requirements for all kinds
of irrelevant basic level courses taught by
teaching assistants in classes of 300.

Students who don't like to waste their
time will thus welcome the opportunity to obtain
an education consisting only of courses that are
directly useful, plus some sidelines that are
intellectually fascinating or culturally
enriching.

As has been well advertized,
the Internet billionaire Peter Thiel has been
encouraging this trend, providing $100,000
fellowships to students who drop out of college
and start a small business. That doesn't
necessarily provide the students concerned with an
education, and it raises the question of what they
will do for a living if their start-ups don't
work, as inevitably many won't if recession
intervenes.

However, the website
uncollege.org, run by Thiel Fellow Dale Stephens,
provides resources to those wishing to educate
themselves without necessarily becoming tech
entrepreneurs. Of course, many such educations
will be incomplete, leaving the students concerned
culturally deprived, but a conventional degree in
computer science or sociology isn't what our
parents would have called a proper education,
either.

Students who self-educate will
find it difficult to get jobs in large companies
or the federal government, which will remain
wedded to possession of the right pieces of paper.
For many students with low self-confidence, this
may be a decisive factor; even if they cannot get
into Yale, the degree from a second-tier college
will give them much greater job security than if
they had self-educated.

However, students
with high levels of ability and self-confidence
will take their chances; there are enough small
companies and entrepreneurial opportunities around
that securing a steady desk job with GE or the
federal government may not seem all that
attractive.

The current credentialism
model faces another problem: the credentials go
out of date. With longer lifespans and inadequate
social security systems, this is an increasingly
serious defect. For liberal arts majors, the need
to re-train may not be extreme. However for majors
in any technical subject, including many of the
social sciences and business, educations obtained
30 or even 40 years ago may have become utterly
useless.

Moreover even large companies
have considerably shorter lifespans than in past
generations and their demise generates involuntary
workforce churn. Thus many will find themselves
needing to retrain at the age of 45 or 50 in order
to enter a different field, or simply in order to
make themselves competitive again in their own
field.

Four-year degrees or even two-year
masters programs will be impossibly expensive for
such people, who generally will have families and
mortgages to support. Again, the availability of
self-education over the Internet will offer them
new possibilities, far more convenient than
overpriced executive education programs.

From the above, the market share of
conventional four-year colleges is likely to go
into sharp decline in the years ahead. Provided
policymakers have the sense to stop subsidizing
student loans with state guarantees and special
provisions to survive bankruptcy, the banks will
become much less willing to encourage the young
and feckless to over-extend themselves in this
way. Students will once again exert pressure on
colleges to reduce their fees, and will choose
cheaper state schools and programs that allow them
to work their way through college.

The
principal losers from this change will be academic
administrators. Colleges that employ a full staff
of diversity officers and pay their presidents $1
million will find the free market blowing a very
cold wind indeed. Meanwhile, students' educational
experiences beyond high school will become far
more diverse, and in some cases very much better
suited to the lives they choose to lead. The
for-profit education sector, currently rightly
despised as low-quality, will extend itself to
offer higher-quality packages at costs far below
those of conventional non-profit colleges.

It can't happen too soon. Like any other
overstuffed, over-subsidized bureaucracy,
America's colleges have got it coming.

Martin Hutchinson is the author
of Great Conservatives (Academica Press,
2005) - details can be found on the website
www.greatconservatives.com - and co-author with
Professor Kevin Dowd of Alchemists of Loss
(Wiley, 2010). Both are now available on
Amazon.com, Great Conservatives only in a
Kindle edition, Alchemists of Loss in both
Kindle and print editions.